SINGAPORE: Oil prices are poised to record their steepest weekly decline since March 2023, as easing tensions in the Middle East have erased the war-driven risk premium.
By 0429 GMT on Friday, Brent crude rose 35 cents, or 0.52%, to \$68.08 per barrel, while U.S. West Texas Intermediate (WTI) gained 40 cents, or 0.61%, to \$65.64. Despite the modest rebound, both benchmarks are headed for a weekly loss of about 12%.
Prices had surged earlier in the week following U.S. missile strikes on Iranian nuclear sites, reaching a five-month high. However, they slumped after President Donald Trump announced a ceasefire between Iran and Israel, with no major disruptions to oil supply reported.
“Absent the threat of significant supply disruption, we still view oil as fundamentally oversupplied,” said analysts at Macquarie, projecting a surplus of 2.1 million barrels per day in 2025. They now forecast WTI to average \$67 this year and \$60 in 2026—each raised by \$2 to account for geopolitical risk.
Some support for prices emerged after U.S. government data revealed a drop in crude and fuel inventories amid rising refining activity. Additionally, market sentiment was lifted by reports suggesting Trump may soon announce his choice for the next Federal Reserve chair, stoking hopes for interest rate cuts that could boost oil demand.
By Reuters
